The aircraft manufacturer is offering to raise pension
payments from a monthly contribution of $50 per year of
service to $56 per year of service. The Machinists want
monthly payments of $120 per year of service. The
union, which said Friday that the initial offer “missed by
a mile,” notes that under the current pension plan, union
members would retire on 33% of their pay, while the Boeing
offer moves that only to 37% (
http://www.iam751.org/
).

Hot Button

Pensions – and job security – have been a key issue for
the union at Boeing, where the average machinist’s age is
47 with more than 20 years experience. Employees
represented by the Machinists make about $50,000 in annual
pay, on average. The union represents about 25,000
workers in Washington state as well as Wichita and
Portland, Oregon.

The economic proposal also would allow employees to
increase the amount they may contribute to Boeing’s 401(k)
retirement plan from 15% to 20% of pay. The firm
would continue to match 50% of the first 8% of employee
contributions.

Breaking from past practices, where pension and
healthcare costs were dealt with separate from pay raises,
Boeing has put together an overall “economic”
package. “All the components of any contract don’t
exist in a vacuum,” Boeing spokesman Chuck Cadena told the
Associated Press in explaining the shift. “We have to put
an agreement in total that is fair and competitive so all
those different pieces, whether it’s health care, pensions,
productivity improvements – those are all related because
they’re part of the same contract.”

Other Issues

Boeing’s initial offer included a 6% ratification bonus
and 2.5% pay raises in the second and third years of the
new contract, in addition to the pension contributions.

Boeing has proposed keeping the same formula for
cost-of-living increases and the same number of paid
holidays, 12. The union wanted two additional holidays.

Boeing is also seeking changes that could, depending on
how much an employee uses healthcare benefits, increase the
total amount employees pay in deductibles, co-payments, and
other costs by an average of $350 per year, according to
the AP.

Next Steps

The company is scheduled to make its “best and final”
offer tomorrow, with the workers scheduled to vote two days
later. The current contract expires at midnight on
September 1.

Job security, another key issue, is being negotiated
separately from the economic elements.